Plant-based

Threat or Opportunity?

Nutri-Wales: Context• The Value of Welsh Food and Drink Report - significant under-investment in

R&D

• Nutri-Wales formed to stimulate joint research, product development, access to new markets and benefit the Welsh economy as well as the nutritional health of Wales

• 237 companies and organisations engaged with Nutri-Wales over the last two years• 126 food companies• 13 “outside the food sector” companies• 21 service providers• 58 engaged in some form of R&D projects

• Nutri-Wales Team working on strong pipeline of disruptive R&D projects

• Future Foods Programme: a product of the emerging and increasing demand for commercially-driven R&D generated by the Nutri-Wales Cluster

2

Today’s presentation

• The marketplace - what is going on?

• What are the market drivers?

• Threat or opportunity?

• If opportunity, then how?

• Collaboration and Innovation

• Talk to us

Plant-based; what’s that all about?Veganuary gathering pace

2/3rds people buying a free-from and dairy alternatives being a ¼ of all free-from sales

It appears to be fashionable

Perceived as healthy

It’s happeningFraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments:

“Looking back on 2018 as a whole, one of the most notable consumer trends is the shift to a more plant-based diet. Today, 1% of all households include a vegan, 5% have a vegetarian and 10% have flexitarians in their ranks. This move has contributed to consumers eating a total of 4.4 billion meat-free dinners in 2018, an increase of 150 million meals on the year before……..

……Meanwhile, over two-thirds of customers bought an item labelled ‘free-from’* over the past month, with dairy alternatives like plant milks making up a quarter of total free-from sales.”

Non-meat reducers

76.3%

Other meat reducers

11.3%

Flexitarians

7.6%

• Kantar Worldpanel // Total in home and carried out consumption // 52 w/e November 2018

Almost ¼ of the population exhibiting ‘meat avoidance’ behaviours

6

Veg

eta

rian

s

3.1

%

Pesceta

rian

s

1.0

%

Total population

Veg

an

s

0.6

%

If people are avoiding meat, how long before they start avoiding cows’ milk too?

46.8

7.9

3.92.0

0.8 0.3

47.9

7.1

4.1

2.00.8 0.4

47.7

7.3

4.4

2.00.8 0.4

48.1

7.2

4.8

2.00.6 0.4

0

10

20

30

40

50

60

Non meat reducers Other meat reducers Flexitarians Vegetarians Pescetarians Vegans

Flexitarians behind the move towards ‘meat avoidance’

• Kantar Worldpanel // Total in home and carried out consumption // 52 w/e November 2018 7

2018

2017

2016

2015

Millions of people

YOY % change +1% -1% +10% -2% -23% +3%

Source: Kantar Worldpanel Usage – 52 w/e October 2018

Savoury evening meal occasions

3 in every 10

savoury evening

meals feature no

meat or fish

140 million more

than last year

Source: Kantar Worldpanel Usage – 52 w/e October 2018

Savoury evening meal occasions

Plant-based meals account

for 1bn meals a year

(3.8% of all savoury main

meal occasions)

Vegans only account

for 14% of these plant

based meals

What is driving this?

• Environmental concerns• Dairy and meat/livestock

constantly cited as a problem (and the biggest contributor)

• Water usage – plant-based uses far less water

• Animal welfare • Vegan PETA type

communications beginning to drip through

• Plastic packaging concerns

But it’s not saving the planet

But it’s NOT milk!!

• The Duck test• If it walks like a duck, has feathers like a duck,

quacks like a duck, chances are………

What's it worth?Consumers are prepared to pay a lot more for a non-animal based product.

• about 3.5% of the total liquid milk market is non-dairy

• potentially worth over double the value / litre of cows’ milk

Strong growth in volume and value at around 15% year on year makes this of real interest. Combining these two categories means that non-dairy milks equate to something in the region of 3.4% of the total retail liquid milk market. But, the value of a litre of alternative milk is in the region of £1.37/litre over double the average value of dairy (cows’) milk

NutritionWhy is dairy not more persuasive ?

Health wellness

Life stages

• Pre-birth

• School age

• Teenagers

• Young male adults

• Healthy aging

The law of unintended consequenceSimplistic messages

Environment

Plant-based

Veganuary

Are these messages driving people away from dairy?

Protein

Fat

Calcium

Avoiding sugar?

Comparison of carbohydrate of which are sugars (g) in animal and plant-based milks per 100ml.

Matching the messages?

• Inertia

• The power of guilt

• It starts in the womb

• Supplements (sourced from where?)

Source: The Vegan Society Web site

•Breastfeeding requires extra protein and zinc, so make sure that

your meals contain good sources, such as beans, chickpeas,

lentils, tofu, cashew nuts, chia seeds, ground linseed, hemp

seeds, pumpkin seeds and quinoa

•The calcium requirement for breastfeeding is nearly 80% more

than the general requirement for adults, so it is strongly

recommended that you include plenty of calcium-rich foods in your

daily diet, such as calcium-fortified foods and calcium-set tofu

•Ensure a reliable intake of vitamin B12 from fortified foods or a

supplement

•Ensure a reliable iodine intake by using a supplement

•Take a daily supplement containing vitamin D

•Consider microalgae omega-3 fat supplementation

Messages; but are they getting through?

• Dairy presents positive health effects with regards to several non-communicable diseases, e.g. dairy consumption is correlated with lower risk of obesity in children and lower risk of developing type 2 diabetes (especially through the consumption of fermented dairy products)

• Regular dairy consumption has shown a positive effect on the reduction of risk to stroke and hypertension

• Dairy consumption has a positive effect on the bone mineral density

• According to the World Cancer Research Fund, there is probable evidence that dairy consumption decreases the risk of colorectal, bladder, gastric and breast cancer

Summary

• Plant-based is happening

• It offers incremental volume and value

• It is inferior for nutrition

• It is superior for the environment

• It is becoming more popular

• It may get a legislative advantage as in, plant-based will become a prescribed choice or livestock may get a cost added

Work with us

• New products require new ways of working• Big companies are finding small and accelerator programmes as a source of

innovation

• Managing the risk• Aggregating demand for aseptic process and packing

• New or scaleable technologies; retort?

• Finance; investor ready programme

• Research and development work? We can help; collaborations, NutriWales and Future Foods programme

• Programmes to tackle waste, new packaging solutions (bio-plastics)

• CEA and the functional foods that might follow through collaboration with dairy

• Let’s talk john.taylerson@bic-innovation.com